Exocentric Marketing is the next phase in the evolution of the “Marketing concept.” There is a new dynamic between customers and companies. We no longer only transact money for goods and services, but now we also trade attention for access, data for value, and permission for intimacy. This new paradigm is only possible in a digitally connected world where consumers create and share boundless data points, and where marketers have the technical capability to make sense of this data to customize marketing engagements, creating 1:1 relationships at scale.

This goes beyond customer focus, and instead recognizes that marketers no longer own their brands, consumers do, and no amount of social good, or holistic messaging replaces true personalization.  We’ll go through the tenets of Exocentric Marketing in more detail below, but first, a brief history of the Marketing Concept as taught in finer MBA programs around the world.

Product Concept | A Focus on Production

Once upon a time, companies mostly made products people desperately needed (food, shelter, clothing, etc.).  In this environment the general belief was, if you make a good product, and offer it at a reasonable price, people will buy it.  This worked pretty well for a while. When the means to create factories and produce products was consolidated into only a few companies, it made sense, but with the growth of industrialization and the proliferation of competition (and shrinking global economies in the depression of the 1930’s) this concept began to break down.

Product Concept 2.0 | A Focus on Sales

This next phase of the evolution still starts with the product, but it recognizes the buyer in the equation, and recognizes that buyers make a choice.  With lots of comparable products on the market, a good sales pitch persuades buyers and wins more business.  This concept is very transactional, and all the terrible arm-twisting sales tactics that’ve ever made you cringe spring from this world-view.  In some ways this is the beginning of modern advertising, as people began to “pitch” products, but it was often disingenuous (snake oil anyone?).  You still see some of this concept in action today, but it began to die out in the 1950s.

Marketing Concept | A Focus on the Market and the Customers’ Wants and Needs

With growth in expendable income, businesses recognized that it was easier to sell one family five things over five years instead of selling to twenty-five different families.  This began to put the focus on the customer. With the rise of cities and larger, more homogenous markets, it was easier to classify customers into big profitable groups whose needs and wants could then be analyzed and understood.  Armed with this understanding, companies could create products the market wanted, instead of talking the market into buying whatever they were making.

This is a fundamental shift, and a valuable one.  Marketing begins with the market.  Sales begins with the product.  Although the Marketing Concept continues to evolve, this fundamental shift remains true.

Social Marketing | A Focus on the Customer and Company as members of Society

With the awakening that came at the dawn of the Age of Aquarius (1970’s) consumers began to choose products not only based on the product attributes themselves, but also in the context of the company that makes it, and their role in society.  This led to a rise in cause marketing, which persists today. Some have theorized this is just another filter consumers began to use to help make sense of all the choices that came with globalization.  Regardless, companies saw increased profits when they operated from this framework so the concept stuck and got a name.

Holistic Marketing | Amplification and Expansion of the Marketing Concept

Some argue that in the 80’s and 90’s marketing shifted to a holistic concept.  This is the rise of Branding Strategy as a unifying vision that connects all aspects of a company’s internal and external communication.  There are others who argue that this is really just an amplification of the Marketing Concept with improved coordination across communication touchpoints.  Incorporating the company’s role in society as a whole – in an attempt to be authentic to the market, is part of this Holistic concept.  Whether it’s a change in concept or a change in execution, there is definitely a shift in marketing at this time to better coordination across channels with more consistent messaging.

Relationship / Permission Marketing | A Focus on the Individual over the Market

Not everyone agrees on these later phases in the evolution of Marketing, but most of us working in the space see an undeniable shift.  With the rise of the internet in the 2000’s, niches delivered riches.  Companies could now reach small markets profitably by aggregating across the web.  Additionally, anyone could start a business, for whatever niche they wanted to serve.  This is the rise of what Chris Anderson called the “long-tail customer” in Wired 2004.

With the emphasis on niche markets, came a focus on individual customer profitability and maximizing Customer Lifetime Value (CLTV).  Marketers began to experiment with predictive analytics for basket recommendations – famously pioneered by Amazon’s “you may also like” feature and Netflix’s recommendation algorithm.

Interactive technology also shortened the communication cycle between customer and company.  As Seth Godin wrote in 2001’s Permission Marketing, companies no longer had to interrupt your favorite TV show to shout at you, they could now have a dialog about your preferences via email.  In many ways personal technology and infrastructure (WiFi / Connection Speeds, etc.) weren’t fast enough to facilitate the truly transformative aspect of this perspective, and few anticipated what came next.

Social / Mobile Era | A Focus on Data and Accountable Advertising

As devices became faster and sexier, and internet coverage became cheaper and more widespread, consumer behavior made a seismic shift.  Now consumers were sharing information about what they liked and disliked, where they were shopping, and what they wanted for Christmas, all for free.  The problem was, companies didn’t know how to make sense of it.  They collected information, but then still ham-fistedly sent the same email / offer / banner ad to everyone.  Not much changed from the interruption paradigm except now they could more accurately measure consumer disinterest.

The wiser companies, began to use customer behavior data in accountable, direct response advertising online.  Google’s fortune sprang from this well.  They aggregated information on what people were searching for, and allowed companies to talk to these searchers, and shared data on who clicked and who didn’t.  The auction for keywords brought a completely new approach to advertising.  Marketers began to assume that if the advertising channel was measurable, it was intrinsically better.  Even if the measurement was flawed, or disconnected from the actual customer interests, it was better if there was measurement.

There was a lot of TV bashing during this era, and some misguided beliefs that traditional media would eventually go away.  This was all clearly wrong.  TV continued to grow in budget and importance, and many of the online media outlets essentially morphed into TV like channels. Marketers learned that just because they could measure a media channel, that didn’t make it better, and challenges with measurement didn’t make a channel intrinsically worse.

Although companies had more information on their customers, they didn’t yet have the technology tools to make sense of this data.  Where the tools did exist, there were few practitioners to create best practices and move the art and science forward.

Exocentric Marketing | Different Challenges and Different Solutions

Just as previous stages in the evolution of the Marketing Concept have built on prior history, the new phase does as well.  The Exocentric marketing concept may be a refinement of previous marketing concepts, but it is different in how it perceives the current marketing landscape, and how it responds to these challenges.

Exocentric view of the marketing challenge

Exocentric marketing understands that the feedback and response loop has changed.  Instead of the old model of a linear path through the funnel, narrowing alternatives, Customers now participate in divergent thinking, increasing alternatives as they research.  In the past, customers were largely reliant on company created materials for information gathering and option evaluation.  Now there is a very public postpurchase experience, creating data that other consumers use in evaluating alternatives.  McKinsey summarized this in a report several years ago.

Exocentric marketing understands that the democratization of information, and increasing customer voice via an always accessible internet puts power in the hands of the customer.  Companies no longer control the information in the marketplace about their products.  Carefully crafted brand statements and flashy ads fall flat if they are not authentic when customers ask their friends on Facebook, read reviews on Yelp, or hear from employees on Glassdoor.  This gives the power to the customer in defining your brand.  Marketers can still shape this brand perception, but they no longer control it the way they once did in a 1 way dialog impacting a linear decision-making funnel.

Exocentric marketing emphasizes customer lifetime value (CLTV) and net promoter score (NPS) with the same importance as top line sales.  Recognizing the loyalty loop and importance of the customer voice postpurchase, modern marketers cannot blindly focus on an initial transactions and expect to win in the long term.  This puts as much importance on understanding current customers as understanding potential prospects.

Exocentric marketing response to current challenges

Recognizing that the game has changed, Exocentric marketers respond to the current challenges of marketing in new ways.

Exocentric marketing is a dialog, not a presentation.  Leveraging the intrinsic interactivity of modern technology and the benefits of always on communication lines, exocentric marketers sense and respond to customer reactions.  This doesn’t mean a Superbowl ad is no longer powerful. It means TV ads can be more powerful when the advertiser creates a feedback loop.  The ad itself prompts the conversation, but it doesn’t end there.  Moving from the monolithic message of a TV ad, exocentric marketers refine the nuance of their message in ongoing communication, customizing to individuals as they respond.

Shifting from one-way communication creates new opportunities for measurement, bringing appropriate accountability to hard-to-measure, broadcast channels.  Instead of the near-sighted measurement of how many sales came from a specific TV commercial airing, marketers can measure how many site visitors it generated.  Attributing online outcomes to offline media shifts measurement to an omni-channel perspective and creates more accurate accountability.

Exocentric marketing defines customers as individuals, not segments.  Although segments are still meaningful groupings for organizational thinking about customers, marketers can no longer stop there.  Modern consumers expect to be treated differently from each other.  They freely share information on their likes, dislikes, and behaviors, in exchange for more relevant and personalized communication.  When the relevance wanes, they feel cheated in the deal and brands lose fast.  Well defined and thoroughly examined Personas guide this understanding of individuals.

Exocentric marketing distinguishes individuals within specific contexts. Not only does exocentric marketing connect with unique individuals, but it also recognizes those individuals have constantly changing contexts.  As a potential buyer of electronics, I have different needs when researching on my laptop than when price-checking on my smartphone inside a store.  Exocentric marketers understand these changes and provide the right information for the right context.  Robust examination and analysis of the Customer Journey informs this contextual relevance.

Exocentric marketing bridges silos to respond to consumers in their changing contexts.  TV campaigns cannot be planned, measured, and executed without integration and orchestration with every other channel.  True omni-channel communication requires an understanding of how consumers use different media in becoming aware of potential solutions, evaluating alternatives, and ultimately transacting with companies.  Sharing data across campaigns allows exocentric marketers to adapt and respond to customers as they move through their journey on a path to purchase.  As referenced above, pairing omni-channel planning with omni-channel measurement and attribution creates a more accurate picture of success.

Exocentric marketers treat different data differently.  Research often supposes a hypothetical situation.  Humans respond differently to hypothetical questions than real-life situations.  Exocentric marketers recognize that a panelist may answer a question one way, but behave another way when they are in the aisle at the moment of truth.  Using data gleaned from actual user behavior changes how marketers interpret and act in response.  When this data is matched to individuals instead of aggregated into groups, exocentric marketers gain new understanding on how to respond.  When this data is collected over time and stored in ways in can be accessed, examined, and enriched, exocentric marketers can make predictions about the future based in reality.

Exocentric marketers use technology to capture, store, enrich, and activate customer data.  The volume, velocity, and variability in modern customer data cannot be dealt with using traditional tools.  Even first generation technology cannot keep pace and exocentric marketers seek out and use the right technology to solve their challenges.  This technology not only enables better insight, but also better activation.  Whether using triggers for automated responses or programmatic optimization, exocentric marketers know they cannot deliver mass customization that adapts to the customer context without using technology.

Exocentric Marketing | What’s next

Some of these concepts are not new, but the evolution to Exocentric marketing is new because of changes in a few areas.   As referenced above the technology necessary to make sense of the available data is new.  Additionally, there were too few skilled practitioners, but as data science programs have flourished at schools and training centers across the country, there are now more marketers capable of tackling modern marketing challenges using exocentric thinking.  Finally, the evolution of the space, with new vendors and partners providing support and thought leadership has led to testing and executions proving the value of these concepts.

The Ten Truths of Modern Marketing is a strategic framework for Exocentric Marketing.  Through this framework it is my belief that marketing will serve a more important role in business and society, as marketers evolve from being interrupters to value creators – introducing consumers to their new favorite products and services, leveraging data and using technology to create seemingly serendipitous moments of customer delight.